Elitism Turns Over a New Leaf

“Innovation is the whim of an elite before it becomes a need of the public.” —Ludwig von Mises

American elitism as we know it is dead. The rules of the game no longer apply. How and where power brokers operate today is more important than ever: true practice has finally trumped mere perception. In these early, uncertain days of economic triage, quirky isolation from the herd seems to be a component in the winning equation. And traditions be damned. While the city folk had just sat down to dine on fresh financial meltdown, the new elite had already grabbed a sack of trail mix and run for the hills.

Take, as a prime example of this shift, Bridgewater Associates, which is headquartered on 22 wooded acres in Westport, Connecticut. Yesterday, it was announced that the hedge fund is the world’s largest this year, heading Alpha magazine’s 2009 top-100 ranking. Of these 100 firms, only a few companies reported an increase in earnings over the previous year. Bridgewater manages $38.6 billion in assets, which is $2.6 billion more than it did at the close of 2007. The company’s founder, president, and chief investment operator, Ray Dalio, cooked up the fund in his Manhattan bedroom 34 years ago. The fatal drought plaguing most hedge funds these days, those big and small, has affected Dalio’s company very little. Could it have something to do with the fact that in a room of hedge funds nervously eyeing one another’s pocket squares, Bridgewater is the bearded fellow with the “Kumbaya” ethos wearing sandals in the corner?Dalio—who hates being called a hedge-fund manager, preferring instead “hyperrealist,” as he described himself to CNN last month—cultivates a culture of competitive zen on the Bridgewater campus. In the company’s mission statement, he writes: “Bridgewater is a community in which our fates are intertwined.” And: “If faced with the choice between pursuing excellence and making lots of money, I’d choose the excellence.” True, the Bridgewater environment cannot help but assume an untraditional, rarefied air when the big cheese meditates every day for 20 minutes (a habit he apparently picked up from the Beatles). Fifty miles and a world away from Wall Street’s hedge-fund alley, the company’s headquarters seems to be the kind of place where portfolio-diversification debates occur on lakeside benches, beneath a canopy of oak and maple foliage.

Of course, Bridgewater is not a lone pioneer in its business approach. At Google’s headquarters in Mountain View, California, a.k.a. Googleplex—“a stone’s throw from the Shoreline Regional Park wetlands”—employees are welcome to wear pajamas in the Google Café, which, if company literature is to be believed, features outdoor seating “for sunshine daydreaming.” And Apple Inc., when it was founded in the 1970s, cleared a path for the relaxed corporate culture that would come to largely characterize Silicon Valley. Sure, American tech companies did well to isolate themselves long ago from the staid corporate culture of the Eastern seaboard. But the world of high-stakes finance has always been inherently different, even if a few major banking outfits have operated beneath names that would make Wordsworth proud—Eton Park, Silver Lake, Lone Pine, Oak Tree, Oak Hill, Blue Ridge, Blue Mountain, Blue Wave, Blue Bay, Blue Crest, to name only a few.

But what’s in a name? If you were to ask Margaret “Meg” Whitman, the erstwhile president and C.E.O. of online mega-marketplace eBay, she would likely tell you that names do have meaning, but their importance must first be earned. After all, hers appears in Times Square–size font along the façade of Princeton University’s newest and largest college, comprising seven dormitories: the most elite of nurseries for this new elitist mentality. (She forked over a cool $30 million for the rights.) And, like Bridgewater, Whitman College, which opened its doors to students in 2007—the same year Dalio took a proactive approach to distancing his firm from the hedge-fund community—has strayed from the traditions of its surroundings in striking ways (no small feat at an institution like Princeton, where traditions, lore, and symbols—eating clubs, no undergrads under the Fitzrandolph Gates, F. Scott Fitzgerald, that Tiger, the color orange, etcetera, ad infinitum—have always been sacred).

The Whitman College philosophy, which seems to be similar to Dalio’s in tone, is a simple one: “forging new traditions to further strengthen the deep sense of community that characterizes educational life at Princeton.” However, to become a member of Whitman is to essentially forfeit the right to join an eating club, which for a majority of Princetonians is the physical embodiment of a real and intimate community. To become a member of Whitman also means living in the Gothic-style complex for four years among faculty fellows, administrative staff, and graduate students. Graduate students! At Princeton! And its main dining facility, Community Hall, is named not for that of the university, or even that of the college. Rather, it is named for the eBay community. What better venue to host the weekly “College Night” dinners, which are open only to the residents of Whitman. It is almost as if eating clubs like Ivy or Cottage took a summer internship at Bridgewater and returned in the fall with a new wardrobe and blue hair—the unlikeliest Big Man on Campus of all. But unquestionably the new B.M.O.C.

What does this mean for the rest of us? The proof is in the mortar, or lack thereof. Last week, developer Larry Silverstein and the Port Authority of New York announced the probable multi-decade delay in redeveloping Ground Zero, which was once the global hub of all serious economic activity. And why not? The Battery is steeped in rancid karma. Shadows of epic corporate failures lurk around every street corner. A far better platform for real and lasting growth, as the likes of Dalio and Whitman might argue, is more isolated from the pack that led us here.